There is an urgent need to develop climate smart agroecosystems capable of mitigating climate change and adapting to its effects. In California, high commodity prices and increased frequency of drought have encouraged orchard turnover, providing an opportunity to recycle tree biomass in situ prior to replanting an orchard. Whole orchard recycling (WOR) has potential as a carbon (C) negative cultural practice to build soil C storage, soil health, and orchard productivity. We tested the potential of this practice for long term C sequestration and hypothesized that associated co-benefits to soil health will enhance sustainability and resiliency of almond orchards to water-deficit conditions. We measured soil health metrics and productivity of an almond orchard following grinding and incorporation of woody biomass vs. burning of old orchard biomass 9 years after implementation. We also conducted a deficit irrigation trial with control and deficit irrigation (-20%) treatments to quantify shifts in tree water status and resilience. Biomass recycling led to higher yields and substantial improvement in soil functioning, including nutrient content, aggregation, porosity, and water retention. This practice also sequestered significantly higher levels of C in the topsoil (+5 t ha-1) compared to burning. We measured a 20% increase in irrigation water use efficiency and improved soil and tree water status under stress, suggesting that in situ biomass recycling can be considered as a climate smart practice in California irrigated almond systems.